New jobless claims fell sizably in the September 1 week to 365,000 for the lowest level in 4 weeks. This is right at the best end of expectations. The weekly decline of 12,000 is the best in 6 weeks. A slight offset is a 3,000 upward revision to the prior week.
Another offset to the latest week's improvement is upward movement in the 4-week average to 371,250. This unfortunately is the highest level in 7 weeks and is slightly higher than the month-ago trend. Yet the 4-week average was trending more favorably during the August 18 week which was the survey period for tomorrow's employment report.
Continuing claims remain stubbornly high though they did fall 6,000 in data for the August 25 week to 3.322 million. The 4-week average is down 3,000 to 3.321 million which is roughly 15,000 higher than the month-ago trend. The unemployment rate remains at 2.6 percent where it has been since mid-March.
There are no special factors skewing today's report which, together with ADP's payroll estimate and the Challenger layoff count, rounds out a strong set of positive news on the labor market.
Market Consensus before announcement
Initial jobless claims were unchanged in the August 25 week at 374,000 (prior week revised slightly higher). The 4-week average was 370,250 which was slightly higher than the prior week but slightly lower than the month-ago trend. Continuing claims are also little changed, down 5,000 in data for the August 18 week to 3.316 million.